The end of falling inflation?
Period Covered: 01 – 07 November 2024
- Shop Price deflation was at 0.6% in November, up from deflation of 0.8% in the previous month. This is slightly above the 3-month average rate of -0.7%. Shop price annual growth remained its lowest rate since September 2021.
- Non-Food remained in deflation at -1.8% in November, up from -2.1% in the preceding month. This is above the 3-month average rate of -2.0%. Inflation is in-line with levels last seen in mid-2021.
- Food inflation slowed to 1.8% in November, down from 1.9% in October. This is below the 3-month average rate of 2.0%. The annual rate continues to ease in this category and inflation remained at its lowest rate since November 2021.
- Fresh Food inflation accelerated in November, to 1.2%, up from 1.0% in October. This is in line with the 3-month average rate of 1.2%. Inflation was its lowest since November 2021.
- Ambient Food inflation decelerated to 2.7% in November, down from 3.1% in October. This is below the 3-month average rate of 3.0% and remained at its lowest since February 2022.
| Overall SPI | Food | Non-Food | ||||
| % Change | On last year | On last month | On last year | On last month | On last year | On last month |
| Nov-24 | -0.6 | 0.2 | 1.8 | 0.3 | -1.8 | 0.2 |
| Oct-24 | -0.8 | 0.1 | 1.9 | 0.0 | -2.1 | 0.1 |
Note: Month-on-month % change refers to changes in the level of prices.
Helen Dickinson, chief executive of the BRC, said: “November was the first time in 17 months that shop price inflation has been higher than the previous month, albeit remaining overall in negative territory. Food prices increased for fresh products such as seafood, which is more vulnerable to high import and processing costs, especially during winter. Tea prices also remained high as poor harvests in key producing regions continued to impact supply. While coffee prices experienced a momentary dip, price rises are imminent as global coffee prices approach record highs. In non-food, while many retailers unwound some of their discounting, there are still many bargains across fashion and furniture. Customers looking to upgrade their electricals were able to pick up some great deals in early Black Friday sales.”
“With significant price pressures on the horizon, November’s figures may signal the end of falling inflation. The industry faces £7bn of additional costs in 2025 because of changes to Employers’ National Insurance Contributions, business rates, an increase to the minimum wage and a new packaging levy. Retail already operates on slim margins, so these new costs will inevitably lead to higher prices. If the government wants to prevent this, it must reconsider the existing timelines for the new packaging levy, while ensuring any changes to business rates offer a meaningful reduction for all retailers as early as possible.”
Mike Watkins, head of Retailer and Business Insight, NielsenIQ, said: “Shoppers are still being cautious by shopping savvy for the essentials and holding back their discretionary spend, so the lower level of inflation should help sentiment ahead of Black Friday promotions. And with lower inflation than this time last year, many food retailers are extending offers and discounts to help sales momentum in December.”
